Main points of investment:
The company's performance is in line with expectations. In the first half of 2019, the company achieved operating income of 10.239 billion yuan, an increase of 20.17% over the same period last year; the net profit of shareholders belonging to listed companies was 211 million yuan, up 13.98% from the same period last year; and the net profit of shareholders belonging to listed companies was 210 million yuan, up 15.29% from the same period last year, corresponding to EPS0.84 yuan. Of this total, Q2 earned 5.4 billion yuan in a single quarter, an increase of 14.12 percent over the same period last year, while the net profit attributed to shareholders of listed companies was 112 million yuan, an increase of 16.67 percent over the same period last year. The company's performance is in line with expectations.
The wholesale business of equipment consumables has maintained rapid growth. During the reporting period, the company's main business pharmaceutical wholesale revenue reached 10.058 billion yuan, an increase of 20.1% over the same period last year, with a gross profit margin of 10.28%, an increase of 0.83pp over the same period last year. From a regional point of view, the company achieved revenue of 4.225 billion yuan in Beijing, an increase of 9.86% over the same period last year, a year-on-year increase of 8.24%, a drop of 0.51pp over the same period last year, and the overall steady growth of the company's pharmaceutical wholesale business; the company realized revenue of 5.832 billion yuan in other areas, an increase of 33.6%, a year-on-year increase of 11.76%, an increase of 1.68pp, and a rapid growth momentum of the company's equipment wholesale business. With the introduction of the two-vote system of equipment consumables and the pilot promotion of volume procurement, the concentration of the whole industry will be further improved. as a leading enterprise in the field of domestic equipment consumables wholesale, the company is expected to seize a larger market share.
The operating efficiency of the company has improved significantly. During the reporting period, the company's sales expense rate was 3.60%, an increase of 0.83pp over the same period last year, mainly due to the company's new business expansion and increased transportation costs; the management expense rate was 1.03%, down 0.05 ppp from the same period last year; and the financial expense rate was 0.92%, down 0.04pp from the same period last year. During the reporting period, the net cash flow of the company's operating activities was 100 million yuan, a significant improvement compared with-321 million yuan in the same period last year, mainly due to the company's strengthening the management of accounts receivable and the increase in payment recovery; the turnover days of the company's accounts receivable increased significantly from 117days in the same period last year to 105days. The operating efficiency of the company has improved significantly.
Profit forecast: we predict that the company's net profit attributable to the parent company from 2019 to 2021 will be 410 million yuan, 512 million yuan and 630 million yuan respectively, corresponding to EPS 1.64,2.04,2.52 yuan respectively, and the current stock price will be 9.6 shock 7.7shock 6.3 times, maintaining the "recommended" rating.
Risk tips: the risk of reducing the price of equipment consumables; the risk of cross-regional operation and management.